Amazon’s fees are always changing, and increasing, and in 2024 Amazon announced their NEW 2024 FBA Inbound Placement Service Fee for FBA shipments. Here’s what it is and what it means for Retail Arbitrage sellers going forward.
What is the new 2024 FBA Inbound Placement Service Fee?
We all know our Amazon FBA shipments get sent, usually, to a nearby warehouse to where we are shipping from. Once they are received in, Amazon moves our stock around to other warehouses – this is what is called FC Transfer, or Fulfillment Center Transfer.
However starting March 1, 2024, Amazon has said they will now start placing inventory closer to customers in multiple fulfillment centers across the country. What this means for us as FBA sellers is, we will now be sending shipments to as many as 4+ warehouses instead of what was typically 1-3 depending on your items.
Amazon is allowing us to choose a minimal split option, meaning you can send to less warehouses, however we will be paying a hefty per-item fee if you choose to opt into that. This new FBA inbound placement service fee for standard and large bulky sized products reflects Amazon’s cost of distributing inventory to fulfillment centers close to customers.
Choose Your Preferred Split Option in SellerCentral
The first thing you should do, if you have not already, is head to your Fulfilled by Amazon settings and make your choice for your preferred method.
Go to Settings > Fulfillment by Amazon
On this page, hit Edit on the Inbound Settings block
Select the best option for your business
For sellers who use third party software to create their FBA shipments, be sure to set this up in your account as this is what pushes out to the third party APIs like Inventory Lab.
Tip: Inventory Lab makes your Amazon FBA Shipments a breeze! If you haven’t used it yet, you might not realize just how much faster you could be doing your shipments – from Buy Lists that import in seconds, to Box Contents so you don’t have to upload into Amazon what is in every box. Inventory Lab also keeps track of inventory costs, values, and quantities. There’s options to break down profitability by SKU, supplier, and category. Inventory Lab is a SUPER helpful tool that I HIGHLY recommend! Get your first 30 days FREE when you sign up by clicking here.
The Three Split Options for the 2024 FBA Inbound Placement Service Fee
Amazon-optimized shipment splits. With this option, you send inventory to multiple locations, estimate a minimum of 4 warehouses per shipment. This is the option that will give you the best chance at paying no additional fees.
Partial shipment splits. With this option, you will send inventory to fewer locations and pay a fee per item in the shipments. You are then able to pick your inbound region. It is important to note that Amazon themselves say any shipments going west will incur additional fees.
Minimal shipment splits. With this option, you send inventory to minimal locations and Amazon will then spread the inventory around to their other warehouses, this will be an additional per item fee for every item in your shipment. You are then able to pick your inbound region. It is important to note that Amazon themselves say any shipments going west will incur additional fees.
What are the 2024 FBA Inbound Placement Service Fees?
Here is the breakdown of the new 2024 FBA inbound placement service fee for both standard size and oversized or bulky items according to Amazon. For a full breakdown and view of the charts, click here.
When you create a shipping plan, you’ll see a fee estimate for each available inbound placement option from the start. This FBA inbound placement service fee will be billed to your account 45 days after your shipment is received, based on the inbound location and the quantities received.
You can view the estimated inbound placement service fee for your shipments on your shipment summary page. The total inbound placement service fee for each shipment will be shown under the estimated fees section.
Tips to Minimize the New 2024 FBA Inbound Placement Service Fee
Tip #1: Break your shipments out by standard and oversize items before you create a shipment in Amazon or other third party softwares like Inventory Lab.
Amazon has said that if you create a shipping plan with a combination of standard-size items, non-standard-size items (for example, large bulky), or special handling categories like Hazmat or Dangerous goods, they will direct your inventory to more than one inbound location, even if you select the Minimal Shipment Splits Option for inbound placement. Which will mean the Minimal shipment splits rate will still apply to each shipment in the shipping plan, even if directed to more than one location.
To get around this, do not include large items, dangerous goods, shoes or clothing in a standard sized shipment. Create separate shipments for those items.
Tip #2 Pay more attention while sourcing to your item’s size and the potential fee.
In the Amazon seller app, you can click to add the fee while you are sourcing to see if the item makes money, should you have to pay the fee. To do this navigate to the profit screen in your Amazon seller app. Click on the “Fulfillment Fees” bar. Toggle on “Inventory Placement” and hit save updates. Unfortunately, there is currently no way to save this so it scans for every item and it is a manual process.
While you cannot see if an item is standard sized in the Amazon seller app while you are scanning in store, you can see it in other apps like Scoutify 2 from Inventory Lab and SellerAmp.
Tip #3: Avoid sending to the West Coast if you can help it.
With the new 2024 FBA inbound placement service fee, Amazon has said that shipments sent to the western area of the United States will see higher fees. To avoid this, opt for the Amazon-optimized shipment splits or if you are going to choose either partial shipment splits or minimal shipment splits, select a location other than “West”.
Tip #4: FBM more of your stock
With FBM there are no additional fees making it a great alternative to listing a few oversized or bulky items or items considered hazmat. Clothing and shoes are also super simple to FBM and you have more control over the returns and customer damages. For more info on how to get started with FBM, check out my FBM Shipping Guide!
2024 FBA Inbound Placement Service Fee: Incentives for New Sellers
Good news for new sellers, in addition to the free $100 shipping credit for FBA shipments, Amazon is offering $400 in credits that apply to the FBA inbound placement service fee. To get this credit, new sellers who create and send their first shipment to an Amazon fulfillment center within 90 days of listing their offer – will qualify for $400 in credits that apply to the FBA inbound placement service fee. In addition to sellers who list their first offer on or after March 1, 2024, new sellers who list their first offer between January 1, 2024, and March 1, 2024, are also eligible for this credit benefit when they use the FBA inbound placement service.
Key Takeaway on the 2024 FBA Inbound Placement Service Fee
Amazon FBA fees are not going anywhere and there is still tons of money to be made selling on Amazon doing Retail Arbitrage. With these new fees, we are basically given the choice to send to more warehouses for little to no fees, and just additional shipping costs, or pay a fee to avoid sending to multiple warehouses. It all comes down to which fee will cost your business less.
